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CA Final · Advanced Auditing, Assurance and Professional Ethics · Reporting

CA Meera's report on Lotus Retail Ltd. contains, within the section addressing a topic that is also covered by an SA-required report element, a statutory reporting requirement of the Companies Act on the same topic. She wishes to present it in the same section as the related SA-required element. What does SA 700 (Revised) require in that case?

She may present it in the same section only if the topics are the same, and the report must then clearly differentiate the other reporting responsibilities from the reporting required by the SAs, so that readers can tell which part is statutory and which is under the standards.

  1. AThe auditor's report must clearly differentiate the other reporting responsibilities from the reporting required by the SAsCorrect
  2. BThe other reporting responsibilities must be omitted from the report
  3. CThe statutory content must be placed in the Key Audit Matters section
  4. DThe other reporting responsibilities must be merged so no distinction is visible

Explanation

SA 700 (Revised) allows other reporting responsibilities to be presented in the same section as related SA-required elements only where they address the same topics. When that is done, the report must clearly differentiate them from the reporting required by the SAs. Merging without distinction would defeat this requirement, and Key Audit Matters is not the place for statutory reporting.

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